Biofuel Startup LS9 Raises $15M More

Now that corn-based ethanol is looking more and more unsustainable — and is the latest media punching bag — it’s time to make way for the next generation of biofuel startups. LS9, a San Carlos, Calif-based start-up that touts itself as a “renewable petroleum company” plans to announce on Tuesday that it has closed a second round of funding for $15 million (update:the release was just issued).

Being one of Vinod Khosla’s growing biofuel investment portfolio, LS9, has received a lot of media attention, including favorable mentions in the Economist and the WSJ. The company’s biofuel technology does make for an interesting story: use synthetic biology to develop biofuels from traditional feedstocks that contain more energy than current biofuels, require less energy to produce and can be distributed through the existing petroleum infrastructure.

If LS9’s technology can come anywhere close to delivering on those three biofuel improvements, it could make its investors a lot of money — oh yeah, and more importantly help transition us to the use of more clean-running vehicles.

LS9 says its biofuels lack oxygen, similar to petroleum, so can be shipped in the existing infrastructure. The two-year-old company faces competition from other startups that are trying using biological processes to tweak biofuel production. For instance, Redwood City, Calif., based Codexis, is making “biopetrol” through a process they call “molecular evolution,” where numerous enzymes are developed and selected in a process not unlike natural selection.